Strengths And Weaknesses Of BRICS

Abstract

The world economy are growing fast and changing frequently in 21st century. And Brazil, Russia, India, China and South Africa are five countries attract the whole world’s attention by their distinguished developing speed. These five countries, as a group, are called BRICS. These five countries have their own strengths and weaknesses, and with their complementary intra trade, their economies can benefit from each other. However, they are facing a huge problem, their economies have run into speed bumps recent years. As a result, their economic growth are slowing down. How to get out of this dilemma is now the biggest problem BRICS should solve.

BRICS Overview

The term “BRIC” was firstly coined by then-chairman of Goldman Sachs Asset

BRICS GDP (Current US$) Figure 2. BRICS GDP Per Capital (Current US$)

(“The World Bank Data”, 2015)

BRICS as a group accounted for over 20% of the world GDP ($75,622 billion)in 2013. We can see from Figure 1 that the increase of GDP in each of the BRICS economies over the period 1990-2013 are striking. Especially, China’s GDP increased almost thirty-fold from $357 billion in 1990 to more than $9 trillion in 2013. India has also outpaced global GDP growth and has grown almost six-fold from $327 billion in 1990 to nearly $1.9 trillion in 2013. The GDP growth of Brazil is a little bit fluctuant comparing with the former two countries, but in recent 10 years, it has found its pace and is now a $2 trillion plus economy. Similar with Brazil, Russia’s GDP growth also has not upward, which maybe came from its unstable political situation over that period, but it has also an over $2 trillion. South Africa, although being left behind by others, is taking step by step, growing slow but also achieved an obviously success from $112 billion in 1990 to $366 billion in 2013 (“The World Bank Data”,

In those eleven years, their total exports have grown more than 500%, while total global exports grew 195% in the same period. Between 2002 and 2012, intra-BRICS trade increased 922%, from US$ 27 to 276 billion, while between 2010-2012, BRICS´ international trade rose 29%, from US$ 4.7 to 6.1 trillion dollars (“itamaraty.gov”, 2015). Figure 5. Intra-BRICS Trade (by destination)

In intra-BRICS trade, we can see clearly from Figure that China was the largest trade partner for each of the other BRICS with a trade share between 72% (India and South Africa) and 85% (Russia). India has a lower share with Brazil and Russia (less than 10%), and a relatively higher share with China and South Africa in intra-BRICS trade. Brazil and Russia did not do much trade with other three countries except China. South Africa’s share took the smallest part in each of the other BRICS markets (“BRICS Trade Policies, Institutions and Areas for Deepening Cooperation”, 2013). Problems and solutions

Speed